The A350 Charge: Batch By Batch

Airbus Group today announceda €434 million charge for the A350 program at its annual press conference in Toulouse. The charge had to be taken because the initial aircraft turned out to be more expensive to build than planned.

But Airbus now also admits what AWST's Jens Flottau already reported in August 2012: change incorporation for a total of three batches is proving to be a challenging task and, given long lead times, this is now beginning to be felt. Here is Jens' report from the 27 August, 2012 issue of Aviation Week & Space Technology:

Airbus Aims To Keep A350 On Schedule, By Batches

Airbus plans to introduce the A350 in several batches, to the chagrin of suppliers and customers alike

Printed headline: Change Order

Airbus is doing everything to keep the A350 on the latest revised schedule and thereby please its early customers. But that means important changes must be incorporated later in production, incurring huge additional costs—for Airbus and its suppliers.

Airbus plans to introduce the A350 in several batches, each of which will incorporate changes, with the most significant modifications made in the transition from Batch 2 to 3. The changes affect parts and components throughout the aircraft, and suppliers have been given detailed design targets that specify the amount of weight reduction needed, among other things.

Batch 1 will include all the flight-test aircraft and early produc-tion versions, including MSN4, industry officials say. The first round of relatively minor design changes will be incorporated with MSN5. The more fundamental upgrade will happen with MSN17, say two executives with knowledge of the matter. Airbus has not revealed the exact points of transition, but Andreas Fehring, A350 senior vice president, head of fuselage and cabin, confirms that Airbus has decided to incorporate the A350 changes by batches.

Airbus has already powered up the cockpit of the first A350, but a lot of modification work is still needed. Credit: Airbus/H. Gousse

The A350's cabin is one major area in which upgrades are going to be made. From MSN17 on, 40% of cabin parts will be changed, industry officials say. Airbus neither confirms nor denies that figure. The redesign includes cabin bracketing—the way the interior is attached to the fuselage—and the air-conditioning system, as well as other interior components.

Other areas that will see significant modification are structural and wing components.

Airbus is under enormous pressure from customers to limit A350 delivery delays as much as possible. It had to announce a slip of up to three months for the first few aircraft into the second half of 2014 because of the late readiness of software for an automatic wing-drilling machine, an issue that Airbus says has now been resolved.

A further update on the schedule for first flight is expected in October, about a month after the wing for MSN1 is to arrive at the Toulouse final assembly line from Bremen, Germany, where it is being outfitted. There has also been a delay in the assembly process of the first wing pairs, given that drilling had to be performed manually. Airbus hopes it can catch up by expediting later steps in the production process.

Industry officials say Airbus plans to make a major announcement regarding the A350 first-flight schedule at the end of October.

The first A350-900 is destined for Qatar Airways. The airline has 40 -900s, 20 -1000s and 20 -800s on firm order. Qatar did not reply to email requests for comment on the matter. Emirates Airline President Tim Clark says he is not aware that Airbus is splitting initial production and says, “but no doubt they will be in touch.” Emirates has ordered 50 A350-900s and 20 -1000s.

The batching approach is one way to try to protect the schedule for first flight and early deliveries from further impact of the changes needed. Airbus CEO Fabrice Bregier, though, has been very vocal in the past that product maturity comes before schedule and that Airbus would rather delay the next step in the assembly process than have to deal with incomplete “traveled” work at a facility that is not prepared to deal with it. These comments do not rule out later block changes, such as the move from Batch 2 to 3, however.

“It sounds like [the Boeing] 787, 747-8 and [Lockheed Martin] F-35 to me,” says Richard Aboulafia, vice president for analysis at the Teal Group, referring to programs that had to incorporate late design changes during production ramp-up. “If you are missing important milestones, you get beaten up by the financial markets or your customers. . . . You want to meet time guarantees more than performance guarantees.”

Introducing upgrades later in production while keeping the schedule intact “is more of a problem in the long term,” Aboulafia asserts. One of the major issues of putting risks on balance sheets is the question of residual values, which become relevant when an operator plans to sell an early-batch A350. The approach is also very expensive, both for Airbus and its suppliers.

Details of Airbus's planned A350 production ramp-up are meanwhile emerging. Industry officials say the manufacturer plans to mate the fuselages and wings of four aircraft in 2012. It aims to do the mating for 12 aircraft in 2013, 24 in 2014 and 42 in 2015. Those numbers do not represent how many aircraft will be delivered in a particular year—the first A350 is not due for delivery until the second half of 2014. But it is an indication of the kind of production growth that is foreseen. Airbus declined to comment on the figures.

The production plan indicates that neither Airbus nor its suppliers have much time to build what are in some ways three different aircraft. “Nobody has the resources that are needed, neither Airbus nor the supply chain,” says the CEO of one European aerospace company. “There is going to be a fundamental cabin rework from Batch 2 to 3, plus the supply chain is ramping up development work for the A350-1000.” MSN17 is likely to be in final assembly by the end of 2013 or early 2014.

The CEO of an important Airbus supplier delivering a variety of parts says the batching “hurts us tremendously. We have to go through a new development process with each change,” which puts serious strain on his company's engineering resources and finances. He is also concerned that the planned steps are not the end of the story, since flight-testing could force more design amendments later. “But we need to have as few batches as possible,” he notes.

There are differing views about what has caused the problem and how serious it is. One industry executive says decisions on crucial changes and detailed design were made too late to be introduced with the initial aircraft. “They have missed the slot,” he says. In light of the detailed requirements that have been communicated to suppliers in the past few weeks, the aim of the whole initiative appears to be clear to him: “Getting down weight and cost.”

Component weight is to be reduced by up to 5% in some cases, but there seems to be a wide range of targets depending on the part.

“I can understand the comments in the supply chain,” says Fehring. “'First time right' is the target, but continuous improvement is also possible.” He says the exercise is “quite a normal process.” Improvements are being introduced “in MSN batches” on the A350, Fehring says, as opposed to the A380 approach, in which Airbus implemented changes with heads of versions (initial aircraft delivered to a new customer).

According to Fehring, the batching is necessary to accommodate developed performance improvements, industrial process findings and design mismatches, which he characterizes as “a lot of tiny things.” He also says there will be some changes to the fuselage structure, without specifying them further. But those are part of the reason why the cabin installation has to be reworked, too.

Fehring confirms that “continued weight improvement is always a target, but we do not need them to meet our performance guarantees.” In other words, Airbus says that even early Batch 1 and 2 A350s will not be overweight beyond contractual obligations.

Other industry executives have doubts, however. One senior official says the first aircraft will be so overweight that Airbus will have to pay damages to the affected customers. The weight-reduction effort has not been going according to plan and has slipped by three months, the official adds. Because of the difficulties, it is not clear yet which planned upgrades can be incorporated in which batch.

Fehring indicates that the batching does not only affect the cabin. “We are driving improvements all over the aircraft to address technical performance or industrial handling,” he says.

The third flight-test aircraft, MSN2, will be the first to have a cabin. With MSN1 and MSN3 flying earlier, Airbus has more time to complete interior development.

Diehl Aerosystems and its suppliers are in charge of most of the A350 interior work. Diehl says that as the A350 is still in development, changes are natural. “All sorts of technical improvement, serving weight-reduction among others, are being constantly pursued in the industry to optimize the product,” says a company official. “The changes currently being worked on for the A350 will successively be taken over into series standard, which is going to happen in several batches. That is a normal process that has already been applied for the A380.”

Diehl says the work is causing “additional engineering efforts” that are “not coming as a surprise.” The company acknowledges that the structural improvements “affect our workshare,” but it declines to confirm that it must replace 40% of parts.